The Covid-pandemic and the largest movement of people since the partition of India have demonstrated that the vast majority of vulnerable urban populations would prefer to be in rural areas during a crisis. The now well-established phenomenon of growth with unemployment shows that a demographic transition from agriculture to industry and from rural areas to cities cannot be the answer. Resolving the crisis in agriculture and rural areas is a growing need.
For decades, a strong argument has grown in favour of opening agricultural markets to greater competition, better infrastructure through private investment and the opportunity for farmers to realise better returns for produce. Not a new viewpoint, and not only by market-friendly policymakers and corporate enterprises but also by a section of farmers. Most prominently, the late Sharad Joshi of the Shetkari Sanghatana opposed restrictions placed on the free movement of commodities within the country and abroad.
Supply chain contribution
The three farm laws enacted by the Parliament in 2020 were pursuant to this position. However, the farmers’ protest led to the rollback of the law. While matters remain in limbo, it is an opportune moment to explore whether access to agricultural value chains, especially the global networks, would help vulnerable rural communities - small and marginal farmers and the landless.
Global value chains in food and agriculture increasingly play a significant role in global and national economies. The International Trade Administration of the US Government estimates that global supply chains account for over 76% of world trade. Around a third of global food and agriculture trade occurs within global value chains. Before they reach the final consumers across borders, agricultural produce, or raw materials are processed and added with other goods, which would be processed in different geographies or countries. So global agricultural value chains (GAVC) refer to the relations linking producers, processors, traders, retailers, and consumers across countries. A vivid example is how wheat is grown in Australia and Ukraine, milled into flour in Indonesia and Turkey, and then exported to make noodles in China and bread in Africa and West Asia.
In the face of an old market procurement system riddled with opacity, corruption, and vested interests in the Agricultural Produce and Livestock Market Committees (APMC), the ability to access GAVCs can inject new capital into agriculture, enable crop diversification and create new paths of efficient procurement and build win-win narratives for rural society.
However, caution is needed. We should not forget the colonial history of GAVCs, as seen in the triangular trade. Human beings from Africa were traded as slaves to the new settler colonies in the Americas, paying for the supply of commodities to Europe. Colonial powers forced similar relations on Asia for the benefit of Europe. While not as oppressive as in the colonial past, power asymmetries continue to exist.
Whether it is through contract farming as done in the past through indigo farming in east India, which started in the late 18th century, or tobacco farming as imposed by the Imperial Tobacco Company, now better known as ITC, or more recently tomato and potato farming by PepsiCo in Punjab, farmers have over the centuries seen how the power imbalance rests in favour of the contracting company. The existence of farmer producer companies (FPOs) and cooperatives does help in ensuring inclusion in the GAVC, reducing the risk of harvest and helping in increasing the bargaining power. Still, on its own, the existence of collectives of farmers is insufficient to counter the unequal power balance with the contracting company and the MNC-dominated GVAC.
The connection with the GVAC does not benefit landless labour and small and marginal farmers. These communities also face social exclusion as they are primarily Dalits, tribals, and other backward castes. The linkage to the GVAC allows local elites to re-align forces against the interests of labour and women farmers. Women workers, for instance, are excluded from handling heavy machinery and are relegated to performing unskilled physical labour.
Challenge for Indian farmers
GAVCs are terrains of intensely competing interests where small farmers and landless workers have little or no negotiating power. Therefore, while opening the agricultural market to GAVCs may build some growth in the rural economy, it will not address the exclusions and discriminations faced by vulnerable rural communities; in fact, it may exacerbate them.
For the agricultural workers of India or the global south, the challenge is to claim land, labour and other social rights as a precondition for securing benefits from their incorporation into the AVCs. Without which, given the competitive edge of the multinational corporations and firms that coordinate value creation across borders, the tendency to drive down the prices paid for the products and supplies leads only to a race to the bottom, creating conditions for low wages and bypassing of even the existing labour regulations. And this is where the role of a strong state in defence of its most vulnerable comes in – through ensuring land reforms, at the very least, ensure homestead land for all, establishing a strong labour rights regime and strengthening the provisioning and delivery of public services – health, education, food security, and employment guarantee schemes.
On such a secure foundation, collective economic efforts informed by feminist perspectives could ensure the protagonism of vulnerable rural communities and build just rural futures for all. From a position of strength, vulnerable communities could work with global agricultural value chains to ensure social and ecological justice.
The author is Executive Director, ActionAid Association